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Technology Stocks : BORL: Time to BUY! -- Ignore unavailable to you. Want to Upgrade?

To: i-node who wrote (7246)	11/10/1997 2:18:00 PM
From: David R	Read Replies (1) \| Respond to of 10836

Respectfully, David, I must still disagree with you. Not that real estate prices can not drop, but that you can draw any comparison to what happened in Texas. 1) The real estate crash in Texas was fueled by run away speculation and some down right criminal behavior by some S&L's as well as an economy that could not support the rate of buildup. The recent real estate runup here was precipitated by a steady population growth which dried up the rental market. When my wife and I saw what was happening with rentals (price bidding, lack of rentals, etc), we decided to buy a house. We got in before the market picked up, hence got a great price. So, unlike Texas, speculation is not he driving force behind SJ's real estate. A strong economy, high rents, and one of the fastest growing, best educated, and highest paid populations in the world is. 2) In Texas, land is plentiful and cheap. Here, that is not the case. SJ is surrounded by mountains, and land is scarce. You have two choices, living 30-50 miles away or more, and spending 1-3 hours in traffic (each way). Or pay the premium to live in the valley. 3) Dallas is not really the Oil Capitol of the World. And Oil is a commodity that while very important to the economy, is generally plentiful, and subject to wild price flutuations. When I was in the Oil industry, we had a boom/bust cycle every few years depending on the price of a barrel of crude. This is very unlike brilliant engineers and leading edge technology that drive the SJ economy. 4) In 1986 when I moved to California, I thought for sure the real es tate market was going to crash. That was a long time ago. Note that I had the same thoughts about the stock market. Wrong on both counts. 5) The real indicator of whether or not housing prices are out of line is when you relate them to wages. A $100K a year single engineer can afford a $225K house. A $250K couple can afford a $450+ house. I do not know what salaries are like anywhere else in the country, but these are typical salaries here. The key to real estate is Location, Location, Location. When you live in the midst of a strong, growing, educated, and affluent population, the land prices will reflect that. Espcially since out here, land and water are scarce. Money is plentiful. Barring a world-wide economic catastrophe, SJ will keep on growing well into the next millenium.